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Naughty Dog co-founder Andy Gavin has said that the decision to sell the studio to Sony stemmed from “skyrocketing” costs of development. In a candid LinkedIn post, Gavin revealed that the leadership was under immense stress over budgets, leading them to their decision to sell Naughty Dog and secure its future.
Naughty Dog was founded 40 years ago, and was sold to Sony in 2001
Founded in 1984 as JAM Software, Inc., Naughty Dog was in operation for nearly two decades before the rising costs of development prompted its sale to then Sony Computer Entertainment. In his note (thanks, Game World Observer), Gavin said that between 1999-2001, Jak and Daxter budget had “busted the $15 million mark.”
“By 2004, the cost of AAA games like Jak 3 had soared to $45-50 million — and they have been rising ever since,” Gavin revealed. “Back in 2000, we were still self-funding every project, and the stress of financing these ballooning budgets independently was enormous.”
Gavin added that budgets continue to be a major issue in the AAA development space, and Naughty Dog isn’t the only studio that resorted to a sale to get the funding it needed to develop the games it wanted to make.
“Looking back, it was the right call,” the note continues. “AAA games have only gotten more expensive since then. Today’s big budget games can easily cost $300, $400, or even $500 million to develop.”
Gavin departed Naughty Dog in 2004 along with co-founder Jason Rubin.